Zhang Juwei, deputy director of the Institute of Population and Labor Economics under theChinese Academy of Social Sciences, said the government should set a long-term mechanismto limit the salary of SOE executives even if the companies are performing extremely well.

“These executives are not recruited from the market but assigned by the government. Manyhuge SOEs have important social functions to provide welfare to society, such as energy andtransportation,” said Zhang. “Paying too much will also affect the feelings of civil servants whodo a similar job to the SOE executives.”

Zhang suggested imposing regulations on the salary of SOE executives based on the salariesof civil servants at an equivalent level.